What Will it Take for you to Stop Playing Safe?
Your bank would never actually demand full payment on your loan, would they? Would they??? Ours did.
Many business owners rely on banks or investment funding to finance their operations – especially at startup. You prepare your financial projections, feel confident about your proposed ROI, and are fueled by the excitement of a new venture.
But what if, despite making every loan payment on time, despite covering all your expenses and turning a profit each year – what if the bank demands repayment anyway? I mean, we all read the fine print and know in the back of our minds that it’s a possibility. But that would only happen if you missed payments, if business was failing and you couldn’t pay your bills – in which case you’d have bigger problems anyway. Right?
Wrong.
After owning our business for over a decade and never missing a single payment, our bank decided quite simply that all golf courses were high risk and they wanted out. Not only that, but they demanded immediate repayment of hundreds of thousands of dollars, just as we headed into the Covid-19 pandemic.
My initial reaction was disbelief, and then anger. We'd spent years building something we were proud of, and suddenly we were being told it wasn't good enough. Not because of anything we'd done wrong, but because someone had decided our entire industry was too risky. And I couldn’t explain clearly enough why our business was different, why we were worth the investment — my arguments just fell flat. It was a gut punch that forced us to prepare for the worst.
We had two options: find a new financial partner who would work with us despite the fact that a major bank was pulling out, or sell. During Covid. And while forced to reduce our selling price by 10% every month until it sold.
We did neither, not directly, anyway.
Instead, we decided to change our business model. We knew we were profitable, but the business had operated pretty much the same way for over 30 years and didn’t present enough opportunity for growth. Instead of focusing on past trends and incremental revenue gains, we decided to highlight the possibilities.
Looking at future trends in the game of golf we proposed the addition of a year-round technology-driven range with Topgolf-style bays, which would substantially increase our annual revenues. We ended up increasing our debt substantially, but with an exciting new vision and clear possibilities for growth, we attracted new financial partners and exceeded our initial projections.
In hindsight, it would’ve been much easier if we hadn’t waited for crisis to force us into changing our business model. Forced innovation is expensive—financially and emotionally. What if we'd spent the previous five years gradually evolving our model instead of defending the status quo? What if we'd been proactive instead of reactive?"
Is there something you can change in your own business to bring new energy and reveal new possibilities for growth? What would you do differently if a crisis forced your hand tomorrow?